Question

72000 Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 wrewall, separately owned future wores and one is a retail chain. The real chain buys 60% of the motres produced. The 19 customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Sleepere's customer activity are as follow Large Retailer Smaller Retailers Units purchased 105.000 Orders placed 1600 Number of sales Manufacturing 563.200.000 Ordering costs allocated" $1.363,500 Salesforce cos te $783.000 Currently customer-driven resigned to customers based Required: Ordering Seing care Costume

Answer 1

Answer with working notes is given below

Activity rates Order filling cost Selling call rate $625.00 per order $1,450.00 per sales call Cost assignment Large Retailers Smaller Retailers $48,600 $3,528,900 Working notes: Total Activity Large Retailers Smaller Retailers Total Cost Order filling cost Sales force costs $1,363,500 $783,000 $2,146,500 $909,000 $522,000 $1,431,000 $2,272,500 $1,305,000 $3,577,500 3,636 900 $625.00 Per order $1,450.00 Per sales call Cost activity rate Activities used Allocated Cost Activity Large Retailers Smaller Retailers Order filling cost Sales force costs $625.00 $1,450.00 3,600 18 882 Customer driven costs Large Smaller Retailers Retailers $22,500 $2,250,000 $26,100 $1,278,900 $48,600 $3,528,900